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What happens Brex't?

Date: Friday 19th January 2018

Posted in:
Industry News, The Week in Politics

You could almost hear the collective sigh of relief from the frontbench as the flagship European Union (Withdrawal) Bill, mission-critical to the Government’s legislative agenda, passed third reading by 324 votes to 295 on Wednesday night.

That’s a majority of 29, much larger than the Government’s nominal hold over Parliament, and means the bill now heads to the upper house. Despite predictable opposition from the bulk of Labour MPs, a major Government defeat was never realistically in the frame.

Former Education Secretary Justine Greening warned that Brexit would not be sustainable if it doesn’t work for younger people, while arch-remainer Ken Clarke called for frictionless economic borders with Europe to ensure future generations are not disadvantaged. Numerous amendments were debated by MPs, including an unsuccessful effort by Labour to enshrine the European Charter of Fundamental Rights in UK law post-Brexit.

Peers will certainly seek to alter the bill where MPs failed, potentially leading to a tense game of parliamentary ping-pong before Royal Assent. Expect a flurry of legislative footwork as politicians of all stripes work to avoid a “no deal” outcome and ensure Parliament has a vote on the final terms of the Brexit deal.

However, despite a pro-remain majority amongst the Lords, it seems hugely unlikely that they would torpedo the bill, and the Government can be reasonably confident that MPs won’t seek to cancel the referendum result. Ultimately, that prevents the bill from being too heavily amended.

Elsewhere in Parliament, the weekend’s major news story made the jump to a thorny political issue as Westminster absorbed the consequences of Carillion’s demise. With the collapse of the firm threatening tens of thousands of jobs and posing a risk to a myriad of supply chain companies, Labour Leader Jeremy Corbyn called the news a “watershed moment” and slammed ministers for “negligence” over the issue.

Carillion’s fall gives Labour an opportunity to make political headway on the long-running debate about how public services are delivered – and where private companies fit in. Jeremy Corbyn branded the current system a “costly outsourcing racket” this week.

Despite an assured performance at Prime Minister’s Questions, Corbyn failed to land a knockout blow. In the longer-term, however, Westminster will need to grapple with how to finance critical projects like hospitals, roads and schools. Public services are an area where Labour could outfox the Tories if it plays its cards right.

The public vs private debate plays out very differently in the energy sector, with the revelation this week that the UK and Japanese governments are actively considering new methods of financing a new nuclear plant at Wylfa Newydd. After the drawn out agony of the Hinkley Point C deal, ministers will be wary of further burdening the public purse, but there is clearly a recognition at the top of Government that new nuclear needs at least some form of state backing.

Thinking will have been crystallised by Wednesday’s warning that the Clean Growth Strategy doesn’t go far enough to hit Britain’s legally binding climate action targets. This is tricky because the Government’s vision for the future energy mix leans heavily on a new wave of nuclear power stations. But with ministers reluctant to commit public money to financing directly these massive infrastructure projects, there are real questions over how and when they can be delivered. This question needs addressing urgently, so expect some form of policy announcement on new nuclear in the coming weeks.